The slowdown in economies, doubts about further interest rate cuts in the U.S., and the unstable political climate in France negatively impacted equities. The Paris stock market was the only one to end 2024 in the “red.”

Europe’s major stock markets closed the final trading day of 2024 with gains, but ended their worst quarter since 2022. Almost all markets recorded yearly gains, except for the French benchmark, which closed in the “red” due to a climate of deep political instability.

The downturn from September to December was linked to uncertainty around interest rates and policies announced by the newly elected U.S. president, Donald Trump, which halted a rally that had taken several markets to historic highs earlier in the year. The pan-European STOXX 600 index recorded a quarterly decline of around 3%, the biggest drop since July 2022.

DAX

In 2024, the benchmark index rose only 5.9%, while the slowdown in European and Chinese economies, automotive industry struggles, and political turmoil in France weighed on market confidence.

European Performances

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The best-performing index of the year was Germany’s DAX, with an 18.9% increase, followed by Spain’s IBEX 35 (+14.8%) and Italy’s FTSE (+12.6%).

London’s FTSE saw a much smaller rise of 5.7%, while Paris’s CAC 40 fell by 2.2%. It is worth noting that recently, President Emmanuel Macron appointed his fourth government of the year to calm pressures from both the left and right in a context of significant legislative fragmentation and difficulties in approving the 2025 budget.

On Tuesday, December 31, the dynamics were reversed, with French stocks leading the gains (+0.9%) and German stocks being the only ones to close with a negative variation (-0.4%), indicating a reassessment of values.

Global Markets

In other international markets, during the Asian session, most stock markets fell as the year ended with caution. Investors reduced bets on strong interest rate cuts in the U.S. in 2025 and prepared for Trump’s incoming administration, with the dollar maintaining its strength against most other currencies.

It is also important to note that the Japanese stock market was closed for a holiday and will not resume activity until next Monday.

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.